Bitcoin (BTC) and most major altcoins are stuck in a tight range with bulls buying near the support and bears selling at resistance levels. Usually, such tight ranges are followed by an expansion in volatility.
Although a few analysts have not ruled out a quick drop to low $40,000s, most traders expect Bitcoin to rebound sharply and move up to $60,000.
Goldman Sachs said in a note to investors that if Bitcoin continues to increase its market share over gold as a store of value and crosses the 50% mark, then it could rally to $100,000 over the next five years.
On-chain analytics provider Glassnode said in its report on Jan. 3 that Bitcoin’s illiquid supply has increased to more than 76% of the total circulating supply. According to Glassnode researchers, the drop in liquid supply suggests that price capitulation looks unlikely in the near future.
Could Bitcoin surprise with a sharp move down and pull the major altcoins lower? Let’s study the charts of the top 10 cryptocurrencies to find out.
Bitcoin’s price is sandwiched between the 20-day exponential moving average (EMA) ($48,033) and the critical support at $45,456. Although both moving averages are sloping down, the relative strength index (RSI) is attempting to form a positive divergence. This indicates that the selling pressure could be reducing.
If bulls push and sustain the price above the 20-day EMA, the BTC/USDT pair could rise to $51,936.33. This level is likely to act as a stiff resistance. If the price turns down from it, the pair could remain range-bound between $51,936.33 and $45,456 for a few more days.
A break and close above $51,936.33 will suggest the start of an up-move that could reach $60,000. On the contrary, if the price turns down and plummets below $45,456, the selling could intensify and the pair could then drop to the $42,000 to $40,000 support zone.
Ether (ETH) turned down from the 20-day EMA ($3,881) but the positive sign is that bulls are not giving up much ground. This indicates buying on dips. The bulls will now attempt to push the price back above the 20-day EMA.
If they do that, it will indicate that the correction could be ending. The ETH/USDT pair could then rise to the 50-day SMA ($4,086), which could again act as a resistance. A break and close above this level will suggest the start of an up-move to $4,488 and then to the all-time high at $4,888.
Contrary to this assumption, if the price turns down from the 20-day EMA, a drop to the $3,643.73 to $3,503.68 support zone is possible. This is an important support for the bulls to defend because a break and close below it could open the doors for a possible decline to $3,270 and then to $2,800.
Binance Coin (BNB) has turned down from the 20-day EMA ($530) and is currently taking support at the psychological level at $500.
If bears sink and sustain the price below the $500 to $489.20 support zone, the selling momentum could pick up and the BNB/USDT pair could drop to $435.30. The downsloping moving averages and the RSI in the negative territory indicate advantage to bears.
Conversely, if the price rebounds off the current level, it will suggest that bulls continue to defend this support. They will then make one more attempt to push the price above the 20-day EMA. If that happens, that pair could rise to $575.
Solana (SOL) turned down from the 20-day EMA ($178) on Jan. 2, indicating that bears are selling on every minor rally. The bears will now try to pull the price below the strong support at $167.88.
If they succeed, the SOL/USDT pair could drop to $148.04, which could act as a strong support. If the bounce off this level fails to rise above $167.99, it will indicate that demand dries up at higher levels.
That could intensify the selling and the pair could drop to the critical support at $120. The bulls will have to push and sustain the price above the moving averages to signal that the selling pressure could be reducing. The pair could then rally to $204.75.
Cardano (ADA) has been trading between the 20-day EMA ($1.36) on the upside and $1.28 on the downside. This is a minor positive as it suggests that bulls are not willing to cede ground to the bears.
The 20-day EMA is flattening out and the RSI is just below 46, suggesting that the selling pressure could be reducing. If bulls thrust the price above the moving averages, the ADA/USDT pair could rise to $1.60 and then to the resistance line of the channel.
A break and close above the channel will signal that the downtrend could be over. This positive view will invalidate if the price turns down and breaks below $1.18. That could pull the price to the crucial support at $1.
Ripple (XRP) turned down from the 20-day EMA ($0.86) on Jan. 3 suggesting that the sentiment remains negative and traders are selling on relief rallies.
The long tail on the Jan. 4 candlestick shows strong buying in the $0.77 to $0.75 support zone. The XRP/USDT pair could now consolidate between $0.75 and the 20-day EMA for the next few days.
A break and close above the moving averages could clear the path for a rally to $1. If bulls clear this hurdle, the pair could start its journey toward the stiff overhead resistance at $1.41. Alternatively, if the price breaks and closes below $0.75, the pair could drop to $0.60 and then to $0.50.
Terra’s LUNA token turned down from the overhead resistance at $93.81 on Jan. 3 and has reached the 20-day EMA ($83). This suggests that bears are selling on rallies.
If bears pull the price below $81.11, the selling could intensify as short-term traders may rush to the exit. The LUNA/USDT pair could first drop to $76.72 and then extend the decline to the 50-day SMA ($67).
Contrary to this assumption, if the price bounces off $81.11, it will suggest that bulls continue to buy on dips. The bulls will then make one more attempt to clear the overhead barrier at $93.81 and push the pair to the all-time high at $103.60.
Polkadot (DOT) has been trading between the 20-day EMA ($28) and the overhead resistance at $31.49 for the past few days. The flat 20-day EMA and the RSI just above the midpoint suggest a balance between supply and demand.
If the price breaks and closes above the $31.49 to $32.78 resistance zone, it will indicate that the balance has tilted in favor of the bulls. The DOT/USDT pair could then start its northward march toward $40.
Conversely, if the price turns down and breaks below the 20-day EMA, the pair could extend its stay inside the range between $31.49 and $22.66 for a few more days. The bears will have to sink and sustain the price below $22.66 to signal the resumption of the down move.
Avalanche (AVAX) slipped below the moving averages on Jan. 4, indicating that bears are aggressively defending the downtrend line. The flat 20-day EMA ($107) and the RSI just below the midpoint suggest a state of equilibrium between the bulls and the bears.
If the price sustains below the moving averages, the bears will attempt to sink the AVAX/USDT pair below $98. If they manage to do that, the pair could drop to the strong support at $75.50.
On the contrary, if bulls drive the price back above the moving average, the pair could rise to the downtrend line. A break and close above this level will signal a possible change in trend. The pair could first rise to $128 and then retest the all-time high at $147.
Dogecoin (DOGE) has been trading in a tight range between the 20-day EMA ($.0.17) and $0.16 for the past few days. This suggests that both the bulls and the bears are not placing large bets and are playing it safe.
Usually, tight ranges are followed by sharp moves. The downsloping moving averages and the RSI in the negative zone suggest the path of least resistance is the downside.
If the price breaks below $0.16, the bears will attempt to pull the DOGE/USDT pair below the strong support at $0.15. If they succeed, it could result in a decline to $0.13 and then to $0.10.
On the other hand, if the price turns up from the current level and rises above the 20-day EMA, the pair could rally to the stiff overhead resistance at $0.19. The bulls will have to clear this hurdle to signal a possible change in trend.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
Fed report finds most Americans who own crypto tend to be high income hodlers
Only 12% of American adults used crypto in 2021, and the demographic gap between those who invested in it and those who used it in transactions was enormous.
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The United States Federal Reserve Board has included data on cryptocurrency in its new Economic Well-Being of U.S. Households in the 2021 report. The Fed’s ninth annual report looked at survey results from 11,000 people questioned in October and November 2021.
The report indicated financial wellbeing is the highest it has been since reporting began, with 78% of U.S. adults “doing okay or living comfortably financially.” That is an increase of 3% over the last three years. As a diagnostic of financial fitness, the report cites the 68% of Americans who say they could cover a $400 emergency expense using cash or its equivalent alone.
The report looked at cryptocurrency usage for the first time. It found that 12% of U.S. adults held or used crypto in 2020, with 11% holding it as an investment, 2% using it for a purchase or payment and 1% sending it to friends or family. Investors holding crypto “were disproportionately high-income, almost always had a traditional banking relationship, and typically had other retirement savings.” Forty-six percent had annual incomes of $100,000 or more and 89% of those who were not retired had retirement savings. Twenty-nine percent had incomes under $50,000.
The profile of the typical user making transactions with crypto differs starkly from investors. The report claimed that almost 60% of these users had incomes below $50,000, with 20% having incomes under $25,000. Only 24% had incomes above $100,000. Thirteen percent did not have a bank account. That compares with the 6% of adult Americans who lack bank accounts. Twenty-seven percent of those who used crypto for transactions did not have credit cards, compared to 17% of the total population.
Those who used crypto for transactions faced other disadvantages as well. Almost a quarter did not have a high school diploma, according to the results of the report.
WEF 2022: Bankers at WEF see the need for caution and speed on central bank digital currencies
Experts point out sticking points as well as greatest needs in the creation of central bank digital currencies for domestic and cross-border, wholesale and retail, uses.
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The process of introducing a central bank digital currency (CBDC) is fraught with unknowns, some of which were elucidated in a panel of experts gathered Monday at the World Economic Forum in Davos, Switzerland. The panel concluded that good design is key to a successful CBDC, and there are fewer challenges for wholesale CBDC introduction.
Bank of Thailand governor Sethaput Suthiwartnarueput said that although many central banks are considering a CBDC, there is little practical experience with them. The Thai National Bank began proof-of-concept programs in 2018. Its mBridge project began as an experiment in establishing a cross-border wholesale payment corridor with the Hong Kong Monetary Authority and has grown to include the Bank of China, the United Arab Emirates and the Bank for International Settlements. Cross-border transactions using traditional banking technology can take days to complete, while CBDC transactions are much faster.
Suthiwartnarueput said the use of blockchain technology can have unintended consequences. It is good for transparency, he said, but anonymity affects scalability. There is risk in a CBDC’s design because smart contracts require that the handling of every situation be specified ahead of time. He cited the current sanctions on Russia as an example of a potential challenge to CBDC design. The Thai central bank is looking at a “limited pilot” for a retail CBDC in the fourth quarter of this year.
International transactions between persons, especially remittances from workers located in other countries, which make up a market of $48 billion per year, are one of the most pressing use cases for CBDCs. Suthiwartnarueput said CBDCs can carry out such transactions at 50% less expensive and 68% faster than current money transfer technology. Currently, the average fee for a transfer of this type is 6.3% of the transaction sum.
Credit Suisse chairman Axel Lehmann pointed out the rapid progress being made by non-blockchain fast payment technologies and raised questions for domestic retail CBDCs, such as whether accounts with central banks would pay interest. Privacy and intermediation are other thorny issues for retail CBDCs. International Monetary Fund managing director Kristalina Georgieva said, “We feel a little behind the curve” in the creation of retail CBDCs, and Bank of France governor François Villeroy de Galhau agreed, saying a “CBDC is not the monopoly on progress,” and central banks should not waste time in introducing it.
Suthiwartnarueput and the French central banker agreed that cross-border wholesale CBDC settlements may become a reality within five years.
fUSD stablecoin launch and rumors of Cronje’s return send Fantom (FTM) price higher
After a strong 2,000% rally in early 2021, Fantom (FTM) price collapsed alongside multiple altcoins and even though the blockchain has an impressive capability, it has yet to find mass adoption due to the lack of a compelling use case. FTM price hit an all-time high at $3.46, only to collapse to its pre-bull market lows under $0.25 after the failure of the Solidly DeFi project and the departure of developer Andre Cronje.
Three reasons for the uptrend in FTM price are the launch of the first native stablecoin on the Fantom network, new protocol upgrades and partnership announcements, which bring new functionality to the network, and speculation that Andre Cronje is working with decentralized finance (DeFi) protocols on Fantom.
Fantom launches its first native stablecoin
The most notable development to occur in the Fantom ecosystem in the past few weeks was the release of fUSD, the first native stablecoin on the network.
The launch of fUSD comes on the heels of the collapse of TerraUSD and looks to capture some of the capital flight from algorithmic stablecoin by offering an over-collateralized alternative.
On May 20, the Fantom Foundation released an update outlining the maximum collateral factor and minting cap for each supported form of collateral. The foundation also set the fUSD staking reward at 11.3%
The update also included details on Fantom liquid staking, setting a global cap of 150 million staked Fantom (sFTM), removing validators for the list of those eligible to mint sFTM and setting a loan-to-value (LTV) ratio of FTM at 90% for the purposes of minting sFTM.
New partnerships improve sentiment for FTM
A handful of recent protocol updates and new partnerships have also helped to bring a boost in momentum to Fantom, including the launch of Snapsync, which allows new nodes to quickly join the network.
With the integration of Snapsync, the time it takes for new nodes to synch could be reduced from 24 to seven hours, helping to enhance network reliability, improve scalability and create a greater degree of decentralization.
Fantom has also announced that it is currently in the process of launching Gitcoin on the Fantom network to simplify the process of obtaining grants to develop in the Fantom ecosystem.
Fantom also partnered with Unmarshal and XP.Network. Unmarshal is a Web3 infrastructure provider that will integrate its indexing services with the Fantom protocol to give developers easy access to organized and granular on-chain data.
Through the partnership with XP.Network, Fantom users will be able to bridge nonfungible tokens (NFTs) between Ethereum (ETH), BNB Smart Chain (BNB), Elrond (EGLD), Aurora (AURORA), Tron (TRX), Avalanche (AVAX) and Velas (VLX).
Did Andre Cronje return?
Another factor, albeit speculative, bringing a boost FTM price is speculation that well-known DeFi developer Andre Cronje could be contributing toward DeFi development on the Fantom network.
Amid rumors about the return of lead DeFi developer Andre Cronje, the price of the native FTM token has risen by almost 40%. Cronje proposed a number of measures aimed at stabilizing the situation and increasing the sustainability of the Fantom ecosystem as a whole.
— Ashley Torres (@torresamba) May 23, 2022
The speculation started when Cronje submitted an fUSD optimization proposal that designed to solve a major depegging issue with the stablecoin on May 20 . A Fantom wallet that is believed to belong to Cronje has also added more than 100 million FTM over the past two weeks.
VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for FTM on May 20, prior to the recent price rise.
The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
As seen in the chart above, the VORTECS™ Score for FTM spiked to a high of 89 on May 20 at the same time as its price began to increase 62.3% over the next three days.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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